Zimbabwe bank chief pleads against IMF expulsion

Zimbabwe’s central bank head on Sunday obliquely pleaded against the country’s threatened expulsion from the International Monetary Fund and denied using undeclared foreign exchange to pay back part of the IMF debt.

“We have one request and one request alone, that is our creditors and the international community should not, as I have said before, take precipitous actions whose effect is to blunt or negate the turnaround efforts currently under way,” Gideon Gono told the state-run Sunday Mail.

“Our non-payment of our dues to the IMF remains a source of embarrassment to every self-respecting Zimbabwean whether in the country or the diaspora,” he said.

Gono denied that last Monday’s payback of $120-million of a $295-million IMF debt was financed from overseas or dodgy in any way.

“We showed the staff of the IMF on Monday the 29th the whole history of the build-up of that money by name of source, date, when the money came through, how much came through, and where we put it,” Gono said.

South Africa’s Business Day newspaper on Thursday said the money came from “undeclared foreign exchange reserves which could be seen by the IMF as a serious violation of its rules on transparent presentation of key data”.

Gono said: “For anyone to suggest that we either raided exporters’ FCAs [foreign currency accounts] or raided any other depositors’ facilities ... is scandalous to say the least.”

He said the funds accrued came through belt-tightening and not from “diamonds in the DRC [Democratic Republic of Congo] ...
or [President Robert Mugabe’s] friends in the region,” namely South Africa.

The IMF’s board will meet on Friday to consider an annual review of Zimbabwe’s economy “as well as the possible issue of compulsory withdrawal,” according to a statement by the Washington-based lender.

Eric Bloch, a respected independent Zimbabwean economist, said that Harare’s expulsion was extremely unlikely as it had demonstrated “good faith” and curtailed public expenditure.

“Also any recommendation taken on Friday to expel Zimbabwe will have to come up for voting at the IMF annual general meeting on the 26 of September and require 85% of the vote,” he said.

“Although Zimbabwe has a fairly small number of friends, it certainly has more than 15%,” he said.

If expelled, Zimbabwe will be the second country to be kicked out from the IMF since the former Czechoslovakia in 1954.

Zimbabwe’s economy has shrunk by 30% since 2000, when the government began seizing about 4 500 white-owned commercial farms, sending agricultural production plummetting.

Mugabe’s government has blamed drought and sanctions by the European Union and the United States for the country’s economic decline, characterised by triple-digit inflation and high unemployment. - Sapa-AFP